Network bargaining with general capacities

Abstract. We study balanced solutions for network bargaining games with general capacities, where agents can participate in a fixed but ar-bitrary number of contracts. We provide the first polynomial time al-gorithm for computing balanced solutions for these games. In addition, we prove that an instance has a balanced solution if and only if it has a stable one. Our methods use a new idea of reducing an instance with general capacities to a network bargaining game with unit capacities de-fined on an auxiliary graph. This represents a departure from previous approaches, which rely on computing an allocation in the intersection of the core and prekernel of a corresponding cooperative game, and then proving that the solution corresponding to this allocation is balanced. In fact, we show that such cooperative game methods do not extend to general capacity games, since contrary to the case of unit capacities, there exist allocations in the intersection of the core and prekernel with no corresponding balanced solution. Finally, we identify two sufficient conditions under which the set of balanced solutions corresponds to the intersection of the core and prekernel, thereby extending the class of games for which this result was previously known.